Medco, Enron tie up to build power plant
Medco, Enron tie up to build power plant
JAKARTA (JP): Publicly-listed PT Medco Energi has tied up with
Enron Development Co. of the United States to build a 136-
megawatt gas-fired power plant in Samarinda, East Kalimantan,
Medco's chairman, Arifin Panigoro, announced over the weekend
that the company's shareholders had approved the tie-up through
an extraordinary meeting early last week.
Arifin noted that the approval of the company's plan marks the
diversification drive of Medco's operations into power generation
from its core business of oil and gas.
In a report to the shareholders, Arifin explained that the
total investment for the joint venture stands at US$37.5
million.
The equity of the joint venture is 50 percent owned by Medco
and 50 percent by Enron.
The report noted that the power venture, named PT East
Kalimantan Power Corp., will establish the power plant under a
build, own and operate (BOO) contract with the state electricity
company PT PLN.
The construction of the plant is projected to start next year
with the first 68 megawatt phase to be operational in 1997 and
the second in 1999.
East Kalimantan Power, which will operate the power plant,
will sell its electricity to PLN.
Under the contract, PLN will be required to buy at least 80
percent of the electricity generated by East Kalimantan Power for
20 years.
"Based on the contract, a minimum revenue for 20 years will be
secured for East Kalimantan Power," the report said.
Gas pipeline
In addition to the power plant, Arifin also reported that
Medco will complete its gas pipeline project from its gas fields
in Tarakan to Bunyu island, both in East Kalimantan, in the
middle of next year.
Arifin explained that Medco's gas output, projected to total
30 million cubic feet a day, will be consumed by the Bunyu
methanol plant, whose operation will be taken over by Medco from
the state oil firm Pertamina.
The Bunyu plant, which has an annual production capacity of
330,000 metric tons of methanol, is currently the only methanol
plant in Indonesia.
The Humpuss Group, through its subsidiary PT Kaltim Methanol
Industry, is building the country's second methanol plant in
Bontang, East Kalimantan. The plant, which will have an annual
capacity of 660,000 metric tons, is expected to start commercial
production in 1997.
Medco is the first oil company listed on the Jakarta Stock
Exchange. It floated 21.7 percent of its enlarged capital base
through an initial public offering on the exchange last October.
Medco is a holding company for its four subsidiaries,
comprised of onshore drilling company PT Meta Epsi Antareja,
offshore drilling firm PT Apexindo Pratama Duta, and oil and gas
exploration and production companies PT Etaksatria Petrasanga and
PT Eksita Pantranagari.
Last week, the company acquired Indonesia's oldest oil firm PT
Stanvac Indonesia and its affiliate from American oil giants
Exxon and Mobil Oil.
Medco reported a net profit of Rp 18.4 billion (US$7.98
million at current rate) with earnings per share of Rp 181.6 last
year. The profit was 37 percent higher than Rp 13.4 billion in
1993.
It projected a 50-percent increase in its net profit this year
and another 50-percent increase next year. (rid)